Athene Holding Ltd. 2Q'20 Earnings Presentation
Disclaimer This presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any security of Athene Holding Ltd. (“Athene”). Certain information contained herein and certain oral statements made in reference thereto may be “forward-looking” in nature. These statements include, but are not limited to, discussions related to the benefits to be derived from the issuance and exchange of common equity interests of Athene and Apollo; the effects of the spread of the COVID-19 virus on economic conditions and the financial markets and the resulting effects on Athene's investment portfolio and price of its common shares; the benefits to be derived from the Athene Co-Invest Reinsurance Affiliate ("ACRA") capital raise; benefits to be derived from Athene's capital allocation decisions, including the repurchase of its common shares; the benefits to be derived from the redeployment of the assets backing the obligations reinsured from Jackson National Life Insurance Company ("Jackson"); expected future operating results; its liquidity and capital resources and the other non-historical statements. These forward-looking statements are based on management's beliefs, as well as assumptions made by, and information currently available to, management. When used in this presentation, the words “believe,” “anticipate,” “estimate,” “expect,” “intend,” "will," "should," and similar expressions are intended to identify forward-looking statements. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to be correct. These statements are subject to certain risks, uncertainties and assumptions, including Athene's failure to recognize the benefits expected to be derived from the transactions with Apollo and Jackson; and the failure to achieve the economic benefits expected to be derived from the ACRA capital raise. For a discussion of the other risks and uncertainties related to Athene's forward-looking statements, see its annual report on Form 10-K for the year ended December 31, 2019, its quarterly report on Form 10-Q for the quarterly period ended March 31, 2020, and its other SEC filings, which can be found at the SEC’ s website www.sec.gov. Due to these various risks, uncertainties and assumptions, actual events or results or Athene's actual performance may differ materially from that reflected or contemplated in such forward-looking statements. Athene undertakes no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise. Information contained herein may include information respecting prior performance of Athene. Information respecting prior performance, while a useful tool, is not necessarily indicative of actual results to be achieved in the future, which is dependent upon many factors, many of which are beyond Athene's control. The information contained herein is not a guarantee of future performance by Athene, and actual outcomes and results may differ materially from any historic, pro forma or projected financial results indicated herein. Certain of the financial information contained herein is unaudited or based on the application of non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to and not as a substitute for, or superior to, financial measures presented in accordance with GAAP . Furthermore, certain financial information is based on estimates of management. These estimates, which are based on the reasonable expectations of management, are subject to change and there can be no assurance that they will prove to be correct. The information contained herein does not purport to be all-inclusive or contain all information that an evaluator may require in order to properly evaluate the business, prospects or value of Athene. Athene does not have any obligation to update this presentation and the information may change at any time without notice. Certain of the information used in preparing this presentation was obtained from third parties or public sources. No representation or warranty, express or implied, is made or given by or on behalf of Athene or any other person as to the accuracy, completeness or fairness of such information, and no responsibility or liability is accepted for any such information. This document is not intended to be, nor should it be construed or used as, financial, legal, tax, insurance or investment advice. There can be no assurance that Athene will achieve its objectives. Past performance is not indicative of future success. All information is as of the dates indicated herein. 2
Business Perspectives in the Current Environment ü Athene is navigating the current environment from a position of strength $3 billion of on-balance sheet excess equity capital 1 – – "A" ratings re-affirmed at AM Best, S&P and Fitch Strong ALRe RBC of 449% 2 and U.S. RBC of 430% – – De minimis OTTI within investment portfolio (2 basis points YTD) ü Athene is capitalizing on the current market backdrop – Record quarterly organic activity of nearly $7 billion at exceptional returns, with business added at wide spreads and historically low funding costs – Closed largest reinsurance transaction in recent history with Jackson National , adding nearly $30 billion of gross invested assets 3 in 2Q'20 ü Strong core earnings power in 2Q'20 excluding drag from mark-to-market losses on lagged alternative investments ü Grew net invested assets by 18% year-over-year to more than $137 billion , including benefit of Jackson reinsurance transaction ü Athene is well-positioned for continued strength in 2H'20 – Rebound in alternative investment returns – Strong organic and inorganic growth tailwinds – Substantial deployable capital 1 Excess capital is presented net of future expected deployment to fund Jackson transaction announced in June 2020. 2 ALRe RBC ratio is used to evaluate our capital position and the amount of capital needed to support our Retirement Services segment and is calculated by applying NAIC RBC factors to the statutory financial statements of AHL's non-U.S. reinsurance subsidiaries on an aggregate basis with certain adjustments made by management. 3 Amounts to $10 billion of net invested assets, excluding the noncontrolling interest from thir1d-party investors in Athene's strategic capital vehicle, Athene Co-Invest Reinsurance Affiliate ("ACRA"). 3
Athene Remains a Source of Strength for Policyholders and Reinsurance Clients Robust organic new business flows at attractive returns despite low interest rates Strong retail volumes amid continued volatility • Strong retail volumes with 44% growth sequentially at $1.8bn +44% attractive returns $1.2bn • FIAs offer principal protection, a crucial feature for policyholders amidst volatile markets • Diversified distribution reach is a source of strength 1Q'20 2Q'20 Record flow reinsurance volumes $2.3bn +163% • Record volumes in flow reinsurance of $2.3 billion in 2Q’ 20, representing 163% growth sequentially at attractive returns $0.9bn • Robust activity with key partners continues despite historically low interest rate environment 1Q'20 2Q'20 4
Multi-Channel Distribution Model Generates Attractive Growth Flexibility to respond to changing market conditions across channels to opportunistically originate liabilities that generate Athene's targeted levels of profitability +24% Retail: strong activity in a challenging market backdrop; underwritten to YoY attractive returns Flow Reinsurance: record activity as key partners remained active in $10.9bn underwriting new policies 1.3 Pension Risk Transfer: activity moderated in the quarter, as expected; closed one US PRT transaction $8.8bn Funding Agreements 1 : record issuance in 2Q'20, including inaugural Euro- denominated funding agreement transaction 3.5 2.6 $6.9bn Record organic deposits in 2Q'20 at 0.2 above-average profitability 0.3 2.6 $4.5bn 2.2 3.1 $3.9bn $3.3bn $2.9bn 1.0 2.3 $2.2bn 0.8 3.7 0.9 $1.0bn 3.0 1.8 1.2 2016 2017 2015 2018 2019 1Q'20 2Q'20 1H'19 1H'20 Quarterly Quarterly Quarterly Quarterly Quarterly Average Average Average Average Average • • • • Retail Flow Reinsurance Funding Agreements Pension Risk Transfer 1 Funding agreements are comprised of Athene's funding agreement backed note program, Federal Home Loan Bank secured funding agreements, and long-term repurchase agreements. 5
Attractive Core Earnings Power Normalizing for interim market volatility impacting alternative investments, Athene's business continues to generate mid-to-high teens returns on equity Adjusted Operating Income - Retirement Services Adjusted Operating ROE - Retirement Services ($ in millions) ($ in millions) +$110 $318 +6% 17% 11% $208 Normalized Alt 2Q'20 2Q'20 Normalized Alt 2Q'20 2Q'20 Retirement NIER Impact Retirement Retirement NIER Impact Retirement to 10% 1 to 10% 1 Services AOI Services AOI Services Adj. Services Adj. (As Reported) (Normalized) Operating ROE Operating ROE (As Reported) (Normalized) 1 Net of DAC and tax offsets. 6
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